Table of Contents - Jared Hope: First Step Toward Owning Income Property
Dave Debeau [00:00:08] I hate everyone, this is Dave Debeau with another episode of the Property Profits podcast, and today my special guest is Jared. OK, Jared, how are you doing today?
Jared Hope [00:00:19] I'm pretty unbelievable today after that.
Dave Debeau [00:00:22] So Jared is a fellow Thompson Okanagan person alone. I'm basing Kamloops, but it's very, very interesting. His portfolio, his focus area is in Alberta, specifically around Edmonton. And Jared is definitely the real deal when it comes to a an active professional real estate investor, a real estate entrepreneur. I believe we've done over three hundred and sixty transactions. Is that right?
Jared Hope [00:00:52] Yeah, we have. We I bought and sold over three three six three seven three. And then we hold one hundred and fifty plus
Dave Debeau [00:00:58] one hundred and fifty plus and you got started in two thousand and three with his wife Krista. Yeah. And was a big, big part of the real estate investment network for many years. He was speaking on stage as our biggest speaker for seven years with Don Campbell. So he's trained thousands of thousands of people across Canada about real estate investing. So you're in for a real treat here today. So, Jared, thank you very much and welcome to the call. Yeah, thanks for having me, man. My pleasure. So Jared wants to walk us through, you know, way back when pre 2003. What was it that sparked you to get into real estate investing in the first place?
Jared Hope [00:01:34] You know, honestly, I get asked this all the time. And the truth is, it's my wife. I had no interest in real estate. And Crystal, we went to an event put on by the real estate investment network back in two thousand three October. And it was a Friday, Saturday, Sunday event. And it was good. Whatever, to be honest, I went there thinking it was some kind of cult or some kind of movement or some kind of some kind of fish get rich
Dave Debeau [00:01:57] when you got you got dragged along by your wife to
Jared Hope [00:01:59] this thing. Yeah, I went to the seminar. Right. And we're young. I'm forty years old. Forty one years old. And that's that's a long time ago. Right. And and so I went away to for lunch and Christmas Day to listen to Don's pitch from stage. And I came back from lunch as his bag and it says the real estate investment network on it. And I'm like, oh man, it's two hundred bucks a month. We didn't have the two hundred bucks. And it's not like we we had a ton of money to start. And so she signed us up for the 17 month Commitment, which is actually three hundred for the both of us. And I was right pissed off and like I was right pissed off. So I went to these meetings for the first six months, arms crossed, sit in the back of the room, half down, just kind of Lululemon. Swardson, the trainer at the time. And after six months, I started, you know, I started learning and understanding and I'm just a real doer. So I went bought my first property in that year. We bought three, which is great, nice. And in the second year we bought it. And then in our third year we bought sixty four. And it's really exploded in our third year, which at the time I thought was super cool. Looking back on it, it was super bad because we almost went bankrupt in 2010 because of all the mistakes that we made in your three.
Dave Debeau [00:03:08] So the learning loss of life experience with real estate, what strategy do you focus on primarily these days? I mean, there's a million different ways to do real estate. What do you guys focus on primarily?
Jared Hope [00:03:21] Yeah, we have lots of five hundred plus goals. So my strategy has always been buy and hold. And I feel that's the longest that's the best bang for your buck. That's how you become a millionaire. Fifteen, twenty years. And I look back at the properties that I bought in twenty three, four, five by twenty five on TV was a multi millionaire and I look at those properties that I have now 15, 18 years later, like they're, they're almost clear title now. And so that's the biggest bang for the buck I think in twenty twelve we started twenty eleven, sorry we started flipping houses and so now it's been six, seven years of flipping houses. I slept close to one hundred houses last year and at eighteen houses alone. So now what we do is we take all of the change that we made in 2010 was to buy down debt. So we want to buy down debt, buy down of the holding properties. Right. Every time we flip a property, we take fifty percent of the profit and we take it to pay down properties. Now, because in 2009 10, when we had the global recession and I was losing eighteen, nineteen grand a month, I couldn't pay my grocery bills and I couldn't if I had a Porsche 911 outside and I couldn't afford groceries, that was a real humbling experience. But I would be OK. Yeah. When we came out of that we just decided, you know what, we'll start buying down debt. And so we increased all of our payments back in 2010. We started increasing our payments, couldn't afford it, increased our payments to buy down our debt because I was always taught in real estate by the property. Keep your payments low, increase your cash flow. And no one ever told me what to do with that money, right? No one ever forced 9/11 with it. Yeah. So I went by the person I live in. I bought a trailer at Quad's. I'd vote. I had all this stuff and my only saving grace was I paid cash for it all. So come twenty. Can I have this hundred and twenty thousand dollar 911 seed for casually convertible, and I can't afford one hundred and seventy eight dollars grocery bill and that's a true story that I couldn't do it to the point I had to call my dad to pay that bill. And as I stand in line at Safeway. So that was my saving grace because one, it is a humbling experience. Told me to get my head out of my ass and fix this or something bankrupt. Although I was a multi-millionaire on paper, I was living literally check to check. So I sold my car, sold my trailer, sold everything. And then we changed our strategy to buy down debt as fast as we possibly could. At the time, it was really hard because, like I say, no one told me what to do with that cash flow. Everyone just said, well, live off the cash will retire in five years. Like, that's such the biggest bullshit story I've ever heard. You can retire in five years off your real estate. You can't, because if you don't plan for a downturn, the economy and the market drops. You have to plan for it. You're in trouble.
Dave Debeau [00:05:56] Yeah, you are very, very. Wise words from experience, we tend to remember those lessons, knowing the ones that stick.
Jared Hope [00:06:06] Listen, man, that was man, those are tough lessons and I'm very grateful I went through them because when we do our coaching programs now or we do our events now, those are our messages. It's cash castles. Great in the theory about it and this magical feeling that we cast from that thing, right? Yeah, it's great. But what do you do with it? And no one ever teaches people what to do with it. And everyone just thinks that they're going to replace your income and they're going to. The truth is, you retired off your real estate. You don't live off it. That's the truth. And that is something that needs to be taught on a regular basis.
Dave Debeau [00:06:37] So what I'm hearing here is that you've got this portfolio of properties. Are they typically single family homes?
Jared Hope [00:06:44] Condos have everything. I have single family perplexities, apartment buildings. I have one condo. I don't I don't specialize in condos at all. I personally don't like condos. I tend to stay away from them. But sweet and family homes are the thing to buy you two for the price of one. You have two units of one's vacant, one's rented. I'm usually break even if they're both rented. I'm strong cash flow. And then now we're buying nothing but new. So we don't buy anything 10 to 12, 15 years old anymore, which is what I started out buying where now it's it's not newly renovated or new. We don't touch it. And to be honest, I stay away from the new stuff because it's just it's too small and it's boxy in the basement. Suites are pretty small, typically the one bedroom basement suites, which are really hard to rent out. No. Right. So we tend to go to the nineteen fifty, nineteen sixty fully renovated product because now all your houses wow. Factor which is very big to me and all your long term repairs, furnace, roof, windows, stuff like that, plumbing, electrical are already done that nobody plans on. Nobody plans to replace the furnace. And when it shows up and you're making one hundred dollars a month, cash flow shows up. Four years later, there goes seven grand.
Dave Debeau [00:07:52] Exactly. Yeah. OK, so very smartly, not by brand new. You're buying newly renovated. Somebody else has done all the work. You're buying it ready to go and you don't have the headaches. You're good to go for ten years, probably three or four.
Jared Hope [00:08:05] Yeah, well the way I do it, I figure I'm good for about fifteen to twenty years before anything major happens. Roofs typically last thirty years. Furnaces are twenty five thirty years. Nowadays they last longer. Water tanks are twelve ish, 10 to 12, 15 years depending on what time to use. So the water tanks can be the first to go. So as of other than wear and tear, normal damage is done by tenants. I'm good, but I can factor that into the bath so I don't have to factor in the repairs and maintain long term repairs minutes. And here's the key that most of that is making. You want to talk about giving tips, little nuggets to your audience. Well, here's a nugget. The number one people one number one mistake people make in investing in real estate is to keep the property too long. So they buy a property and they think it's their own personal house. They have to get to keep this thing for twenty five years and rapid down. They're going to do twenty five, thirty year. And that's the biggest mistake I see people make when the truth is I'm not saying don't keep it for twenty five years. I'm just saying have a plan at number eight, you're at your number eight to re the property because after year number eight you should have eighty to one hundred thousand dollars of mortgage buy down, which you could take your money out, take the down payment out, no appreciation and now you can take that money and go buy two properties. You actually double your portfolio and your number eight. Also, if you sell the property in year number eight, it still has a wow factor. The roof is new, the furnace is near the wall. All those big expenses are still there's still life in them, which means the next buyer ain't going to they're not going to hammer your purchase price. So it still has a lot of value to the next purchaser. So your number eight is when every single house needs to be revaluated.
Dave Debeau [00:09:44] That's you know, that's that's very, very good advice. You're the first guy I've heard give that advice specifically. So, yeah. Everybody else, you know, especially by an old it's never get rid of it.
Jared Hope [00:09:53] Totally. Nobody in your number eight, you can sit there and say, yeah, this kid, this house is still cash flowing. The area is really good. My tenants are in there for five, six years. Whatever it is, market's gone up. I'm going to keep it another eight years. Great. Keep it another year, years. But if you keep it another eight years now, you have to change your math a little bit because now you have to start factoring in some long term repairs and maintenance that are going to start showing up. The second mistake, investors I see investors make over the years of talking to thousands of these investors is they don't do their math right. So they don't factor in these long term expenses. So all of a sudden when they show up, they're just used to cutting checks. So they don't actually factor that into the cash flow of the property. They just kind of check out this kind of check, all those kind of check. But it actually makes the house like a massively negative.
Dave Debeau [00:10:39] Yeah, that makes sense. OK, well, towns like you've got a good amount of experience under your belt, you've gone through some some serious hard times with your business, you've come out the other side, you're much stronger for it, you know, and part of rain, you've helped and talk with thousands of people. Now you're you're doing your own thing. So we were talking a little bit before we started recording about how you're helping people with your coaching and whatnot. So what is because there's lots of different real estate coaches out there and you're aware of that. What do you think that. Makes what you do a little bit different than the norm is, that's an effort to make a lot of sense, right?
Jared Hope [00:11:20] Yeah, that's an easy one. I do it. I see so many people that are coaches. And it's funny, this is a small, small business. So when you see someone advertised on social media and their coach and they're doing this a lot of times, I know their back story. And you got to understand, like, we all have hidden agendas. We all have an agenda. We all want to make money. We all want to serve a purpose for us. So you've got to be careful with finding coaches because everyone's a coach. And that's a subject that word's actually getting so drawn out that it actually has no purpose or value to it. The big difference with me in this, maybe this is my my only sales pitch I have is I'm physically playing the game like, you know, I'm not one of these guys on stage who's talking about doing it a certain way. And they haven't bought a property in 15 years. Because how you bought a property in 15 years ago and how you buy it today are totally different. And you do that today from 15 years ago. Totally different types of properties that are working 15 years ago today are totally different. So if you're following people that have done it 15 years ago, you know, it's tough, right? So the biggest thing with me is I'm physically doing it. So all of our students, I take 12 students at a time and this is a plug for me. Just so we're clear, we take 12 students at a time on an eight month journey, and we condensed everything that I've learned in my 18, 19 years to eight months. And when they go buy a property, I'm there with them. They use my team, they use my agents, they use my mortgage broker. They use my lawyers, accountants, inspectors. I have the team that they don't have to go recreate. And obviously, if they invest in them and it's a lot easier to my teams in Edmonton, but they don't have to. I got to Cabo San Lucas. I got to from Vancouver. I got one from Toronto. I got seven from from Edmonton. So my coaching is more of a let's go do it versus here's how you do it. Yeah. Here's the theory. Here's the practical. I'm the plumber in the trenches every single day, so I'm going to be a plumber.
Dave Debeau [00:13:12] One of my pet peeves about coaches these days, now that we're on that tangent where you get the big companies that roll through town and they they sell you into a forty thousand dollar coaching program. But the guy that's coaching, it's boy, they've got that. They're paying fifteen, twenty bucks an hour who may or may not have ever done a real estate transaction. Chances are if they're working for fifteen or twenty bucks an hour, they're not actively doing it or they wouldn't be doing that job. Right.
Jared Hope [00:13:38] So you all honesty on this rant is, I agree with you 1000 percent. And it's actually pretty easy to market against that because no offense to anybody who runs these groups or these programs, they have their business model and they have their approach on doing so. They take their members and make them coaches and then they go off and sell these coaching programs or whatever they're doing or they sell a forty thousand coaching program. The reality is this. It's like eight years ago I sat down with a financial planner years ago and this and I'm a multimillionaire at this point on paper. And so I sit down with financial planner and he's like, OK, we're going to make you this, this, this, this is we're going to have this in twenty years. And at that, I'm like, that's awesome. Show me your portfolio. Yeah. And they're like, well, I'm at work on doing it. What if you haven't done it yourself? You can't teach me how to do it. And it all goes back to the statement I made a few minutes ago is buying real estate 15 years ago and buying it. It's a different and you can go take lessons from someone fifteen years ago and not have the same success and the same results as they did versus following someone who is actively playing the game today. If you're picking a coach, make sure they they've gone through at least two downturns, make sure they have well over 50, 60 properties, make sure they have tight systems and a staff, and make sure you're dealing with that person versus their team.
Dave Debeau [00:14:56] Exactly.
Jared Hope [00:14:56] Well, it's an out of my mind.
Dave Debeau [00:14:58] We just got a couple of minutes here before we wrap up. So, you know, you've been coaching a lot of people. What is one somebody listening to this? What is one thing that they could actually go out and do that you would suggest would actually make an impact on their portfolio for them getting started? You know, besides hiring a good coach, what was an action that they could do?
Jared Hope [00:15:21] Yeah, well, first of all, don't talk to anybody about it. Don't talk to your parents or your friends or family. There's a lot of them are going to put you on your right for having this dream of getting into real and then they'll fill you up with all these horror stories. Yeah, the horror stories do exist because port systems were implemented. That's the only reason why those horror stories. And so the number one thing I would do is very rich dad, poor dad. I would go. That was the number one book that I read. Don Campbell has a great book, Real Estate Investment Canada, another excellent book I would start with that I would be careful with big groups. And because once again, if you go, there's a lot of theory being taught in them and there's lots of them. I'd also be careful with groups coming into your city from other places because they don't necessarily understand the demographics of the area. The most important thing I would do is I would go find someone to follow and and pay them to do it. Like the. I think people make because they want something for nothing. And if you're getting something for nothing, you're only getting a little taste of it, which means there's lots not being said, which opens up the door for a mistake that can cost you thousands and thousands and thousands of dollars.
Dave Debeau [00:16:28] Makes sense. All right. So if people are interested in finding out more about you, do you have a website you have like a special order or a book or something?
Jared Hope [00:16:36] Yeah, I have. You can follow me on YouTube, Jared Hope, and follow me on Facebook. My company is called Till Promptitude. I'm on Instagram, which is Jared Hope. I don't do a lot of stuff on Instagram. Facebook is everything thing me. You know, the best thing to do is just follow us on Facebook and we put all our events on there and put all of our topics on there, deals on there, everything's up there. So Facebook's one of the biggest in properties. And our website w w w tilt group. That's awesome.
Dave Debeau [00:17:05] Jared, this is a great thank you very much for the tips. Again, that whole really reevaluate the property after eight years. That's a golden nugget right there, my friend. That's a writer down, that's for sure. Really enjoyed today's conversation with you. And hopefully we can have you back sometime in the future. Yeah. Anytime it goes fast at any time.
Jared Hope [00:17:26] I know time flies. So anytime you need me, let me know.
Dave Debeau [00:17:28] Thanks very much.
Jared Hope [00:17:29] Thanks, everybody. Thanks. Thanks for.
Dave Debeau [00:17:31] Well, thanks very much for checking out the property profits podcast. We like what we're doing here. Please head on over to iTunes, subscribe read us and leave us to review it. Very, very much appreciated. If you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom Ticker.